Caterpillar Inc. and DuPont Co. slumped at least 6 percent, pacing declines among companies most-tied to economic growth. Alcoa Inc. (AA) and Chevron Corp. (CVX) slid more than 4.8 percent as commodities erased this year’s gains on speculation that demand for energy and raw materials will slow. FedEx Corp. (FDX), operator of the biggest cargo airline and a proxy for the economy, lost 9.5 percent after cutting its profit forecast.
The S&P 500 fell 3.5 percent to 1,126.26 at 12:10 p.m. in New York, poised for the longest slump since Aug. 2. The Dow Jones Industrial Average lost 419.40 points, or 3.8 percent, to 10,705.44. The MSCI All-Country World Index slid 4.7 percent, extending a drop from its May 2 high to more than 20 percent.
“I don’t know how much further the market can go down,” David Kelly, chief market strategist for JPMorgan Funds in New York, said in a telephone interview. “The real problem is that policymakers keep on proposing solutions which either won’t be implemented or simply do not work. The Fed needs to express confidence on the economy itself.”
Between April 29 and Aug. 8, the S&P 500 fell 18 percent on concern about Europe’s debt crisis and an economic slowdown, closing within 29 points of a bear market, or a 20 percent drop. Since then, the index has rebounded 4.2 percent through yesterday.